Jim Dey | Emanuel wants to lead! Does anyone want to follow?

Jim Dey | Emanuel wants to lead! Does anyone want to follow?

Illinois residents who have strong stomachs are looking with anticipation to see how Gov.-elect J.B. Priztker and the supermajority Democratic Legislature address this state's serious financial woes after they take office in January.

But it's an outgoing politician — Chicago Mayor Rahm Emanuel — who last week kicked off an emotional conversation about this state's future. He called for amending the Illinois Constitution's pension clause in a way that could slow down skyrocketing costs to taxpayers.

"The truth is, going back decades, too many elected officials, labor leaders and civic leaders agreed to a funding and benefits system that was not sustainable and therefore not responsible," Emanuel said.

As mayor, Emanuel is responsible for Chicago's vastly underfunded public pensions. But the state's public pensions also are in dire condition. Just recently, a legislative commission disclosed that state pension underfunding has increased to $133 billion, a jump of about $4 billion over last year.

Emanuel called for two amendments, one to raise more revenue and the other to cut future pension costs.

His first proposal would replace the state's flat income tax with a progressive one — rising rates on rising income levels. His pension proposal would modify the state's pension clause, which states that public pension benefits "shall not be diminished or impaired."

The pension clause has been interpreted by the Illinois Supreme Court to mean that the pension benefits in place on an employee's first day can never be prospectively modified.

That's a problem because years ago, legislators — without determining future costs or how they would be paid — established annual 3 percent cost-of-living increases to retirees.

There is considerable discussion about whether modifying the pension clause is — or is not — sound public policy.

Union leaders vehemently attacked Emanuel's proposal, describing it as an immoral breach of public employees' trust.

But some public officials, as well as The Chicago Tribune, expressed quick support and urged mayors across Illinois — Danville, Peoria, Springfield, Rockford, Streator — to work for passage because the current system is unaffordable.

"Mayors and other local officials could apply leverage, too. Many of them have the clout to push their local lawmakers for change. They can see up close how pension costs are straining their budgets," the Tribune editorialized.

But, whatever the merits of these proposed amendments, it's extremely difficult to pass any constitutional amendment.

That's why state Sen. Chapin Rose, a Mahomet Republican, said that "as a practical matter. ... I don't think (Emanuel's proposal) is going to happen."

He could well be correct.

For starters, it takes a three-fifths vote in both the Illinois House and Senate to put an amendment on the ballot.

Desperate for more revenue, Pritzker favors a progressive tax amendment. But he's repeatedly said he opposes a pension amendment. At the same time, legislators with large numbers of public employees in their districts would be hesitant to vote yes.

Further, amendments require a 60 percent yes vote to pass — a significant barrier put in place to ensure consensus on serious matters like revising the state constitution.

The proposal would not be the subject of a public vote until November 2020. What do state and local officials do in the meantime?

Rose said he has some ideas — pension buyouts for younger members — but fears discussion of constitutional amendments could delay legislative action for two years.

Finally, there's a potential legal hurdle. Voters could amend the state constitution pension "contract," a term used by the Illinois Supreme Court.

But what of the U.S. Constitution's provision that protects contracts?

Article I states that "no state shall pass any law impairing the obligation of contracts."

Making matters even worse, state and local pension problems are only a part of Illinois' witches brew of financial woes. Unpaid bills and years of unbalanced budgets also hang over the heads of newly elected leaders, many of whom already have demonstrated no interest in dealing seriously with this state's financial problems.

Jim Dey, a member of The News-Gazette staff, can be reached at jdey@news-gazette.com or 217-351-5369.

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